May 15, 2019
Kent Bevan
In Country Preferred Insurance Company vs. Lee, Christopher Lee suffered bodily injuries in a car accident in 2016. The at-fault driver’s insurance company paid Lee the full amount of the Driver’s Policy, $100,000, but Lee had accrued more than $400,000 in medical bills so he looked to his carrier, Country Preferred Insurance Company, where he and his wife had three auto policies, one for each of their three vehicles. The Lees sought $300,000 from Country Preferred as each of their polices included $100,000 in underinsured motorist (UIM coverage). Country Preferred refused to pay citing the policies’ definition of an underinsured motorist, which limited UIM coverage to situations in which the at-fault driver’s policy limit is less than the insured’s UIM coverage limit and also, to the policies’ anti-stacking provision which provides that an insured’s UIM coverage limit is the highest applicable limit of liability under any one policy. In the Lee’s case, that was $100,000. Country Preferred filed suit against the Lees’ seeking a declaratory judgment to that effect and the Lees’ counterclaimed for fraudulent misrepresentation and unjust enrichment. The trial court granted Country Preferred’s motion for judgment on the pleadings and the Lees’ appealed challenging only the dismissal of their fraudulent misrepresentation and unjust enrichment counterclaims.
On appeal, the parties agree that the anti-stacking provision bars the Lees’ from recovering any money from Country Preferred for the car accident. The Lees contend that as a result, Country Preferred has committed fraud and has been unjustly enriched by collecting three separate premiums for UIM coverage when the anti-stacking provision renders the UIM coverage in the Lees’ second and third policies worthless in every circumstance or to use the language of Missouri courts “illusory”.
Midwestern Indemnity, Co. v. Brooks (8th Circuit 2015) precludes the Lees’ claims however. In Midwestern, the 8th Circuit explained that anti-stacking provisions did not render UIM coverage in multiple policies illusory because the premium paid for coverage under each policy corresponded with an increase in coverage. The terms of the policy at issue in Midwestern provided UIM coverage not only to the named insured and their family members but also to any other person occupying your covered auto. Therefore, the premiums paid for each additional covered auto buys UIM coverage for non-named, non-family passengers and drivers in that vehicle. This is also true of the Lees’ policy with Country Preferred, which defines any insured vehicle as the vehicle described in the declarations page. The court found that the payment for UIM coverage under the Lees’ second and third policies buys coverage for non-named, non-family passengers and drivers of the Lees’ second and third vehicles and therefore such coverage is not illusory.
The 8th Circuit affirmed the District Court judgment.